Pakistan announces defence budget increase

In real terms, adjusted for inflation, Pakistan's military expenditure is forecast by Janes Defence Budgets to increase by a substantial margin in 2025. (Janes Defence Budgets)

Pakistan has announced a defence budget of PKR2.55 trillion (USD9 billion) for 2025–26. According to documents released by the country's Ministry of Finance (MoF) on 10 June, the new allocation is a 17% increase compared with the revised defence budget in 2024–25 and a 20% rise against the original allocation in that year.

The 2025–26 defence budget includes PKR704.4 billion for operating expenses for the Pakistan Armed Forces, a 29% increase over the revised allocation for 2024–25. This hike reflects Pakistan's growing tensions with India following their three-day border conflict in May.

Other key appropriations in the new defence budget include PKR846 billion for employee-related expenses, which is an increase of 2% over the revised expenditure; PKR663 billion for physical assets, a 20% increase; and PKR336.5 billion for civil works, a rise of 30%.

A separate pensions appropriation in the federal budget also provides PKR742 billion for the military. Another separate allocation is the Armed Forces Development Programme (AFDP), which is thought to augment military procurement. News reports in Pakistan said the AFDP would receive PKR300 billion in 2025–26.

In addition, Pakistan's state-run defence industrial enterprises receive PKR1.7 billion in the 2025–26 federal budget. The money supports the continued development of Pakistan's naval shipbuilding facilities, including those operated by Karachi Shipyard and Engineering Works (KSEW).

New procurements